What Are the Differences Between Inbound Marketing and Outbound Marketing

1. What are the differences between inbound marketing and outbound marketing? When (what situations, which customers, companies) does one work better than the other?

Inbound marketing is a collection of marketing strategies and techniques focused on pulling relevant prospects and customers toward a business and its products. Inbound marketers offered useful information, tools, and resources designed to attract prospective customers to the company during the time when prospects were actively engaged in a search for a particular product or service. The informative content that the inbound marketer produced was used to entice prospects to interact with the company and begin a relationship with it.

Outbound marketing – A business’s message is pushed to a mass audience that contains who are not in market for that product

Instead of interrupting people with television ads, inbound marketers create videos that potential customers want to see. Instead of buying display ads in print publications, they create their own blog that people subscribe to and look forward to reading. Instead of cold calling, they create useful content and tools so that people call them looking for more information. Instead of driving their message into a crowd over and over again like a sledgehammer, they attract highly qualified customers to their business like a magnet. To be maximized, inbound marketing required three distinct The first was the ability to write compelling content that would attract customers to the business. The second skill was the ability to distribute that content so that it was easily found by prospective customers using search engines, which required a sophisticated understanding of search engine. The third was the ability to attract and engage a community of followers who

interacted with the content, added their thoughts to it in an ongoing dialogue, and disseminated it to

others. Firms that nurtured an active audience gained credibility in the marketplace, because it was the support of an audience that conferred expertise in a particular area.

1. Consider the Owner Ollies segment:

• Estimate of annual market potential? (sometimes called TAM which stands for Total Available or Total Addressable Market; it is the total annual value of the market in dollars that your business would earn if you achieved 100% market share; one time fees are typically excluded from the TAM calculation)

=50%*(1.67+.3)*250*12=        5.1B

1.67= 0-19

20-99=use prorata                                                        

• Describe them:

• Firmographics?

Small business owners with 1-25 employees, simultaneously manage multiple business functions, do not have a dedicated marketing professional,

Curious about web2.0 and inbound marketing but had not made investment in consulting, s/w, programs in this area.

Interested in filling the tops of their customer funnel in a short time and wanted quick simple solutions and less price sensitive and did not shop.

How do they make purchasing decisions?

• What kind of operations do they run?
• What problems do they face

Terrible website; lack time

• What is the Customer Life Time value of an Owner Ollie (without any discounting, so “i” in the CLTV formula is 0)?
• OO-CLTV = (M/(1-r+i))-AC  = 250/(1-r)-AC = 250/(.043)-AC = 5814-1000 = 4814        
• Use monthly data for “M” and “r” in the computation (use monthly revenue for “M” as we do not have an estimate of monthly margin)
• See Krishnamurthi “Note on Computing Customer Life Time Value[pic 1]”

1. Consider the Marketing Marys segment:

• Estimate of annual market potential?
• =50%*2289023*$500 =        572,255,750        
• Describe them:

• Firmographics?

Size; type, location

• How do they make purchasing decisions?

Purchase orientation

• Who decides, what criteria
• What kind of operations do they run?

Operating variables

• Operating bottlenecks
• Technology used
• Level of sophistication

• What problems do they face?

• What is the Customer Life Time value of a Marketing Mary (without any discounting, so “i” in the formula is 0)?
• MM-CLTV = (M/(1-r+i))-AC = 500/(0.032)-AC = 15625-5000 = 10,625
• Use monthly data for “M” and “r” in the computation (use monthly revenue for “M” as we do not have an estimate of monthly margin)

1. Consider Owner Ollies and Marketing Marys:

• Provide arguments for choosing Owner Ollies
• Provide arguments for choosing Marketing Marys

1. Consider B2B vs B2C customers:

• Provide arguments for choosing B2B customers
• Provide arguments for choosing B2C customers

1. If you were HubSpot, would you focus on specific customers? If so, who?  If not, why not?

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